Decentralized cryptocurrency exchange dYdX has launched its layer 1 blockchain, creating the genesis block that will operate using the native DYDX token.
The dYdX chain will distribute all fees to validators and stakers in the form of USD Coin (USDC). This includes transaction fees denominated in USDC and gas fees for transactions denominated in DYDX or transactions denominated in USDC.
The proof-of-stake (PoS) blockchain network is built using Cosmos’ software development kit and uses CometBFT as its consensus protocol. Validators stake DYDX in order to protect the blockchain and perform governance operations on the network.
The launch of the dYdX Chain network itself encompasses a large number of companies:
@dydx_ops_subdao General coordination of creation and publishing + hosting indexer and frontend
@dydx foundation Coordinate community governance
@noble_xyz, @circleapp, @coinbase Used to start…— Antonio | dYdX (@AntonioMJuliano) October 26, 2023
dYdX founder Antonio Juliano emphasized that the launch of the dYdX chain depends on companies such as Circle and Coinbase launching on Cosmos in time to create its genesis block. Juliano previously described dYdX as “a new blockchain built on the Cosmos SDK” and “the first decentralized, off-chain order book.” Blockchain is also completely open source.
Prior to the launch of dYdX’s native layer 1 chain, the original DYDX was an ERC-20 token running on dYdX’s original Ethereum layer 2 protocol. In order to facilitate the transition to its own layer 1 chain, the dYdX community voted to adopt DYDX as the L1 token of the dYdX chain, adopt a one-way bridge from Ethereum to the dYdX chain, and give the wrapped Ethereum DYDX (wethDYDX) the same The governance utility in dYdX v3 is ethDYDX.
As a result of community voting and governance, the use of the DYDX token has expanded to be used for staking on the dYdX chain, securing the network and assisting with governance.
Similar to Ethereum’s transition to PoS, stakers and validators secure the network and receive a portion of the dYdX protocol proportional to their staked assets. Fees collected by the dYdX Chain protocol are distributed among validators and stakers Distribute modules through Cosmos.
An announcement from dYdX highlighted its expectation that governance on the dYdX chain will be more accessible than previous Ethereum-based layer 2 protocols:
“dYdX Chain does not have the concept of ‘proposal power’ of dYdX v3; instead, the governance module effectively enables any holder to create governance proposals with deposits.”
Provisions to combat spam proposals include minimum deposit thresholds and voting mechanisms with veto power. Users can only use pledged DYDX tokens to participate in on-chain governance.
Chain validators will also inherit the voting weight of stakeholders unless a specific stakeholder chooses to vote on a proposal individually.
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